At 22:36 on Thursday, there was market news that the UK’s Brexit trade deal had been finalized and would be submitted to British Prime Minister Johnson and European Commission President von der Leyen for approval. The pound briefly surged up to the 1.36 handle against the dollar before retracing its gains as the market remains on the sidelines. In addition, U.S. stock indexes were almost unchanged, and U.S. 10-year Treasury yields were little changed. The pound and the U.S. continued to sink after European Commission President von der Leyen’s speech.
As the end of the European Union is getting closer and closer, the pound bulls seem to be more calm, after all, last night there was an “oops incident” – the British and European sides have not yet concluded negotiations, Sky News reported that the British government sources said the agreement to leave the European Union has been completed, but soon a source clarified that the agreement is not completed, the pound staged a high and falling market.
But tonight on Christmas Eve, perhaps the UK and Europe really want to “peacefully break up”. The British government later also confirmed that a trade agreement has been reached, and said that all the key red lines on the return of sovereignty have been reached, the EU court can no longer function.
British officials said the Brexit trade deal lifts tariffs and quotas. According to the Wall Street Journal, the U.K. will leave the EU single market and customs union on Dec. 31. According to market sources, the U.K. Labour Party said it would make a formal response to the agreement in due course, having previously said it was in the national interest.
In addition, the UK’s Brexit trade deal includes a temporary solution that would keep data flowing after the end of the Brexit transition period, thus allowing businesses to transfer data between the EU and the UK under existing rules. EU officials said the bridge solution will last for up to six months, by which time the European Commission should have made a full decision to guarantee the legal flow of data meaning that until a full decision is made, the UK will continue to comply with the current EU data regime.
On the EU side, the EU ambassadors will meet on December 25 at 10:30 local time (17:30 BST). 22:55 pm, European Commission President von der Leyen said at a press conference that
The road to Britain’s exit from the European Union has been long and winding, but we have reached a good deal. The agreement is fair, balanced and right. The agreement has the necessary security measures built in to ensure that both sides have a strong incentive to stick to the agreement reached.
We will ensure that we continue to work with the UK in all areas after Brexit, that the EU is well prepared for Brexit and that the UK remains a trusted partner. It is now time for the EU Council and Parliament to analyze the Brexit trade agreement, and then they will adopt it.
Von der Leyen explained that the reason for the tough EU negotiating position is that if the UK wants to enter the single market without quotas, then they will be free to decide whether to play by the rules. European Council President Michel added that the agreement will be analyzed in detail and then a decision will be made whether to ratify it in the new year. EU chief Brexit negotiator Barnier then said
The free trade agreement will have new ecological rules, the UK has been given the new status of an independent coastal state and the EU will support fishermen.
German Foreign Minister Thomas stressed that EU member states will carefully review the Brexit trade deal and hopes that Germany will quickly assess whether it can support today’s Brexit agreement. As the rotating presidency of the EU Council, Germany will make every effort to ensure that the trade agreement will enter into force on January 1 as scheduled. German Chancellor Angela Merkel added that cabinet members will discuss Germany’s position on Dec. 28.
Even though the agreement is finalized, the Brexit process is far from over. Sources revealed that the UK and the EU may renegotiate parts of the agreement in the future, and the European Commission will implement the trade deal provisionally until Feb. 28. The two sides could impose tariffs on each other over the dispute, or even be terminated over it.
At 23:30, British Prime Minister Johnson also held a press conference, stating.
I’m pleased to tell you that we have completed our biggest trade deal to date, which is a comprehensive Canadian-style agreement (meaning no tariffs on most goods moving between the UK and the EU, only border checks, though the flow of financial services is restricted) that will allow our companies to get more things done with European countries.
We have taken back control and the jurisdiction of the Court of Justice of the European Union (ECJ) has ended. The share of the UK fishing industry will rise from about half to 2/3 and we will become an independent coastal state.
There is a clause in the agreement on a level playing field where they can impose tariffs if either party dumps or reduces prices.
Irish Foreign Minister Covney added that about a quarter of the EU catch in UK waters will be returned to the UK; ensuring access to UK waters within 5.5 years.
Johnson also noted that the British Parliament will vote on December 30 (on the trade deal) and that we have the same basic objectives as the EU.
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